NEW YORK - Fitch Ratings affirmed its AAA credit rating for the United States and said the outlook is stable, citing the nation’s central role in the global financial system and its flexible, diverse economy.
Standard & Poor’s on Aug. 5 cut its US credit rating to AA+ from AAA, saying lawmakers failed to cut spending enough to reduce record deficits. Moody’s Investors Service affirmed its top US ranking last week.
Since S&P downgraded the United States, the yield on the 10-year Treasury note, a benchmark for everything from mortgages to car loans, has declined to as low as 2.03 percent from a high this year of 3.77 percent.
The United States may be placed on negative outlook, indicating more than a 50 percent probability the nation will be downgraded in the next two years, should weaker than estimated economic growth or a failure by a congressional committee to enact $1.2 trillion in budget cuts spur projected debt levels to rise more than estimated, Fitch said yesterday.
Marketable US government debt outstanding has risen to $9.4 trillion from $4.34 trillion in mid-2007 as the government borrowed to bail out the banking system and lift the economy out of recession. The United States went from budget surpluses averaging $139.7 billion from 1998 through 2001 to a deficit of $1.29 trillion last year, Bloomberg data show.
That has not raised the country’s borrowing costs, however. Average debt yields of 1.5 percent in July compare with 6.54 percent in 2000.
Fitch forecasts publicly owned federal debt will stabilize at 85 percent of gross domestic product and gross government debt at 105 percent, higher than any other AAA-ranked sovereign entity and “at the limit’’ of debt that would be “consistent’’ with a top credit grade.